The 3 Smartest Ways to Spend Your Tax Refund
When it comes to your tax refund, should you spend it, or save it?
You tax refund just came in the mail, and it actually made you do a double-take. Awesome! Now, before you go spending all of that money on that 70’’ LED flat screen television, take a second to think there, cowboy! You’re thinking too small. And by that, we don’t mean buying a bigger TV. You have to think about the big picture, and about your future. The LED TV will still be there when you save up for it, and you’ll appreciate it more since you bought it with your hard-earned money. Here are the three smartest ways that you can spend your tax refund and have it work for you, instead of against you.
- Comfortable Retirement Investing
Investing in your retirement portfolio is a good way to spend your tax refund because the money you’ll be putting in will avoid the tax process. A Roth IRA is a very attractive for many people. The principle grows tax-free, and there’s no required minimum distribution throughout your lifetime as there is with a traditional IRA.
- Paying Off Credit Card Debt
Financial experts always put paying off debt in the top three most important things for which you can use your tax refund. By using the proceeds from your tax refund to pay off that debt you’re reducing your interest, and lessening the grip that banks have on your finances.
- Cushion for “Rainy Days”
Experts recommend that you keep no less than six months’ worth of expenses in an emergency, easy-to-access account, such as a savings account. Building this cushion is by no definitions fun or exciting, but it’s necessary—especially in an unpredictable economy. Emergency funds don’t seem necessary, until you’re met with an emergency.
Sure, LED TVs are cool, and who wouldn’t want one. But being smart with your money is the only way you’ll be prepared for the emergency days. And, who knows, maybe in a few years you’ll pay off all your debt so that some of that can go into that television. Here at Remland Insurance we would be happy to help you invest your tax refund into additional insurance coverage as well as review your policies and let you know where more coverage is needed. Until next April!